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Sales of newly built homes in the US rebounded by the most since July 2016 last month but were shy of economists’ forecasts.

New home sales climbed 3.7 per cent in January from the previous month to an annualised pace of 555,000 units, the Census Bureau said on Friday. That was shy of economists’ expectations of a 6.4 per cent gain, to a pace of 571,000 units.

January’s gain followed a downwardly revised 7 per cent decline in December home sales.

Earlier this week, a report from the National Associaton of Realtors, found that sales of previously owned homes, which account for a larger portion of the US housing market, climbed to the fastest pace in nearly a decade.

Job growth, wage gains and low mortgage rates have helped support housing activity even as a tight supply of homes has pushed prices higher. The rise in home sales comes ahead of the key spring selling season and as homebuyers anticipate higher mortgage rates as the Federal Reserve has signalled three rate rises this year.